We use a fixed $ annual fee advisor who custodies at Schwab & uses a couple of Vanguard funds. Neither are load.
Fee Only Advisor wants to use Schwab
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Closet_Gamer
Thinks s/he gets paid by the post
This is my reaction as well.
If he's going to be actively trading, and therefore need direct access, I would run away.
If he's going to build a stable portfolio that only gets tweaked annually, I don't know why he need access.
You could just send him your quarterly statements and he can crunch the numbers.
I'd be very cautious about giving anyone trading authority on my accounts. I did that once many years ago and it quickly went from making me feel like a high roller to making me cringe every time I looked at what he was doing.
YMMV.
I may be misremembering but I thing Sarah's firm uses Schwab funds for their clients.
I don't use a financial adviser but I do use schwab funds. There is nothing nefarious about schwab funds - lots of super low ER Mutual funds and ETFs, and they allow you to hold non schwab funds (like vanguard) in your brokerage account... something Vanguard doesn't.
I don't use a financial adviser but I do use schwab funds. There is nothing nefarious about schwab funds - lots of super low ER Mutual funds and ETFs, and they allow you to hold non schwab funds (like vanguard) in your brokerage account... something Vanguard doesn't.
Many advisers trade clients accounts. I use the term trade loosely. They implement the investment advice that they provide. This way they know it was done in a timely manner. Yes, you do have to have a level of trust, but you can see what is happening. This really is not all that rare and there are many advisers who do this without doing anything unethical.
I think many are over thinking the Schwab being custodian. An adviser learns a system at one or two financial custodians and then sticks with them. Why? Because it is easier. Think about simple word processing. How many of you would use MS Word for a document. Then for the next document use iPages, then LaTex (look it up) for the next document. Then Manuscript (old Lotus product that was really good for equations back in the late '80s). It makes sense to learn a good tool and keep using it as long as it is a good tool. Switching interfaces for each client does not enhance the FA advice.
I talked with an adviser that uses Fido and Schwab. However, for an individual client they only will use one or the other... not both. Why? Because it is easier.
Some custodians do provide some benefits. I believe Schwab provides some research and online tools.
MRG
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If a person is managing say 200 clients assets do you think they login to Vanguard or Schwab for each and every client when a change is needed? Guess again. Say all clients were adding to an allocation, would you trust yourself to login manually and change each clients account(s)? I wouldn't.
It takes different tools!
It takes different tools!
target2019
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Before signing anything, I'd be asking many more questions. For example, is this cheaper than a robo-adviser? It sounds like your needs are very simple, and you need to set allocation, and then rebalance. Robo at any firm will do that for you.
When Schwab or any company ofr that matter gives an FA a management platform, it is much different that having someone added as a restricted agent to a Vanguard account, for instance.
1. You need to investigate the FA's credentials. If he is affiliated with Schwab, then look into what Schwab knows. Research as much as you can, and seek other opinions.
2. I would never add an individual FA to any of our accounts.
3. There may be tax implications to what you are contemplating.
It seems that you are probably moving some funds from place A to place B. Without knowing specifics, you're asking quite a lot for someone to speculate.
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
That's a good summary of why a management platform is required for an FA.
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You can also do it online if you know the account numbers, they will send letters to each person stating it has been done. And of course both people have to agree to it within their own account.
It of course can only be initiated from the client side, not the agent side.
I don't recall exactly where it was but it's in the settings for an account.
+1
I'm set up as an agent on my in-law's accounts at Fidelity. When I log in, I see their accounts as a subsection alongside mine. I'm also set up same way for DW's IRAs. I have full trading authority on all the accounts.
At Fidelity, this can all be done online. My in-law's each had to log in to their accounts. I helped them make the selection and fill in the forms online. After submitting, the system sent them each an email with another form that had to be electronically signed and returned. On the joint account, it sent an email to both of them. I had full access the next day. Pretty simple, and very convenient if you are managing a relative's accounts for them.
Thank you to everyone that has replied! It seems to be just like everyone else has mentioned, probably for his convienance, not necessarily for a kickback. For those asking why he needs access it is because I make quarterly deposits and he provides a recommendation and if we agree, he does the rebalance for me. His fee is not even close to 1%, it is completely reasonable and it is worth it to me. Thanks again!
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EastWest Gal
Thinks s/he gets paid by the post
One more reply. I'e used a fee only advisor using Schwab for years. I switched advisors last year. I can see all of my accounts, including an self-managed account account and my inherited IRA.
The advisor does get a discount for their orders that I do not get. My advisor rebalances when it is appropriate to do so. Other than that, we talk regularly and she makes sure I am comfortable with the portfolio. She did some tax loss harvesting maneuvers this year, which taught me a lot about how to do it.
Without a professional advisor at the outset, I would have done poorly at investing. My DH has no interest in the subject. The internet wasn't available then.
I won't be made to feel stupid by members in this forum over my choice.
Schwab has a user friendly robust platform. I'm very happy with it. And it's easy to transfer money to your portfolio and out of it as well, directly from your bank.
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The advisor does get a discount for their orders that I do not get. My advisor rebalances when it is appropriate to do so. Other than that, we talk regularly and she makes sure I am comfortable with the portfolio. She did some tax loss harvesting maneuvers this year, which taught me a lot about how to do it.
Without a professional advisor at the outset, I would have done poorly at investing. My DH has no interest in the subject. The internet wasn't available then.
I won't be made to feel stupid by members in this forum over my choice.
Schwab has a user friendly robust platform. I'm very happy with it. And it's easy to transfer money to your portfolio and out of it as well, directly from your bank.
Sent from my iPhone using Early Retirement Forum
Bestwifeever
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No fiscal shaming here. I happen to handle almost all our money, which is at Vanguard in an IRA. DH has a very small inheritance that he left with his parents' choice, Edward Jones. I know that should I not be available to continue my stellar fiscal duties (i.e., we just leave it all in the accounts we put it in 8 years ago), he will either move it all to Edward Jones or pay a Vanguard advisor to take care of it, and he won't worry a whit about it then either.
Are you saying that the advisor gets a discount that he does not pass on to you or that you benefit from a special rate by using the advisor?
Just curious, if the former, I would not consider him a fee only advisor, if the latter case, you gain an additional benefit (good for you!).
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I don't think I've ever read folks thinking someone is stupid for having an advisor.
Frankly I think sometimes I read posts of people saying they are investing themselves and buying/selling X,Y,Z and I think to myself either they are brilliant or brilliantly foolish.
Some people come across as very confident in their abilities, but it's very possible 10 years from now, they will be poorer than they could have been.
So do what you are comfortable with, and as long as it's a well informed decision, it's probably good enough to perfect.
travelover
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I went back and re-read this thread and don't see anyone dissing you personally, so I don't follow the bit about members making you feel stupid. I read opinions here and then I do whatever I want and I think you should, too.
Originally Posted by samclem View Post
? C'mon. You know you have no means to "hold him accountable." What are you going to do, give him a severe talking to? All you can do is try to make him feel bad if his recommendations don't work out (that's unlikely to be effective).
Oh thanks so much! Your comment and samclem's have been so incredibly helpful and condescending!! Thank you! I can't imagine my life without you guys!!
#sarcasm
This is exactly what EastWest Gal is talking about...
? C'mon. You know you have no means to "hold him accountable." What are you going to do, give him a severe talking to? All you can do is try to make him feel bad if his recommendations don't work out (that's unlikely to be effective).
+1
So funny, that is what I was also thinking as I read it, but I was thinking a tongue lashing would set him straight .
Oh thanks so much! Your comment and samclem's have been so incredibly helpful and condescending!! Thank you! I can't imagine my life without you guys!!
#sarcasm This is exactly what EastWest Gal is talking about...
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I completely agree! Same with my taxes. I am sure that many here would say that I am foolish for paying someone do help me with my taxes as I could easily do them myself. My accountant pointed out 2 different opportunities, that I no idea existed, last year that ended up saving me 35K in taxes. But I could have done them myself...
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
.....
Oh thanks so much! Your comment and samclem's have been so incredibly helpful and condescending!! Thank you! I can't imagine my life without you guys!!
This is exactly what EastWest Gal is talking about...
Well it was a funny to thing to say about holding your advisor accountable, as unless you are a lawyer and could sue him for some legal breach of contracts or duties, it will mean nothing.
You can be sure your advisor has already disappointed somebody somewhere and been told about it, and it means nothing as everyone knows "you can't please everyone".
An no it's not what EastWest Gal is talking about as I never said you were stupid for having an advisor, I'm pretty sure you wouldn't do it if you thought it was stupid.
Lucantes
Recycles dryer sheets
I have a FA that currently manages about 9% of my total investable assets, and they do it at Schwab. They have access to a specific sub-account I have at Schwab which they use for individual stock investments (no ETF's or MF's etc.). I can see everything that they do within the account and have had no issues with them.
I will however be ending the relationship with them during the 1st Quarter of 2017 in preparation of our ER as we will be using all of those managed funds to purchase immediate requirements for our retirement and return to the USA (cars, home improvements, furnishings, electronics and every other new thing that we need to start a new life etc.).
All of my other investments (except for FB stock I hold at Schwab) are at Vanguard managed by me without any FA access or input.
I have no problem with my FA, or with Schwab compared to Vanguard etc.
In the long term I will not have an FA (previous FA performance is on par/slightly above my own performance, even after their fees).
I will still have assets at Schwab but they will most likely be my short-term assets (for use in 1-3 years).
All other assets will be at Vanguard in MF's.
It has worked okay for me, YMMV.
I will however be ending the relationship with them during the 1st Quarter of 2017 in preparation of our ER as we will be using all of those managed funds to purchase immediate requirements for our retirement and return to the USA (cars, home improvements, furnishings, electronics and every other new thing that we need to start a new life etc.).
All of my other investments (except for FB stock I hold at Schwab) are at Vanguard managed by me without any FA access or input.
I have no problem with my FA, or with Schwab compared to Vanguard etc.
In the long term I will not have an FA (previous FA performance is on par/slightly above my own performance, even after their fees).
I will still have assets at Schwab but they will most likely be my short-term assets (for use in 1-3 years).
All other assets will be at Vanguard in MF's.
It has worked okay for me, YMMV.
I don't think it's possible to make a person "feel stupid." If the person "feels stupid" (or, more likely, believe that they have behaved in a stupid way) after reading and evaluating the comments of others, then they are responsible for that feeling. Accepting this puts responsibility where it belongs, and doesn't cede power/responsibility to external entities.
Similarly, claiming that an FA is "accountable" for investment results, etc. Unless the FA has done something illegal, there's no way to "hold them accountable." We each have a big vested interest in taking care of our property, and that can't be delegated away. We can buy assistance, but we can't really delegate responsibility for this (short of getting a court order declaring ourselves to be incompetent). I suppose it's possible to buy a scapegoat or fall guy to personally blame if things don't go well, but that's just a way to purchase emotional (not real) protection from an outcome that's really our own responsibility. Ultimately, we are accountable to ourselves.
Locus of Control.
Similarly, claiming that an FA is "accountable" for investment results, etc. Unless the FA has done something illegal, there's no way to "hold them accountable." We each have a big vested interest in taking care of our property, and that can't be delegated away. We can buy assistance, but we can't really delegate responsibility for this (short of getting a court order declaring ourselves to be incompetent). I suppose it's possible to buy a scapegoat or fall guy to personally blame if things don't go well, but that's just a way to purchase emotional (not real) protection from an outcome that's really our own responsibility. Ultimately, we are accountable to ourselves.
Locus of Control.
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MikeTN
Recycles dryer sheets
My advisor uses Schwab
I have used an advisor for part of my funds for the past two years. He uses Schwab and it is convenient for him and for me. I can go to his website to see my holdings or I can go to Schwab's. Each is different but informative.
Do they get a kickback from Schwab? I'm pretty sure they don't. He told me so, and my daughter is a CFP who works with him -- so I trust him to tell the truth.
I think that Schwab has set up an interface that works better for advisor/investor relationships than have the other guys, especially if they use etf's/funds from different companies in the same portfolio.
I have used an advisor for part of my funds for the past two years. He uses Schwab and it is convenient for him and for me. I can go to his website to see my holdings or I can go to Schwab's. Each is different but informative.
Do they get a kickback from Schwab? I'm pretty sure they don't. He told me so, and my daughter is a CFP who works with him -- so I trust him to tell the truth.
I think that Schwab has set up an interface that works better for advisor/investor relationships than have the other guys, especially if they use etf's/funds from different companies in the same portfolio.
Thank you! This is exactly the type of helpful response I was looking for! I feel much more at ease now. Thanks again!
I believe lots of folks here think DIY is the best way to go such that spending money on an advisor is a waste if not worse.
